In Liz We Truss

shakahislop

Well-known member
I'm not at all saying that Austerity was justified by the way, please don't take what I'm saying as any kind of argument for that - as far as I know most economists predicted that it would be counterproductive and they seem to have been right in that despite cutting loads of services and benefits and making life worse for many of those who needed help the most, it did not end up saving any money or reducing the national debt. In fact I would say that Austerity was an ideological act with a made up economic justification.

And I reckon that a lot of the time when politicians say that they are forced to act in a certain way by economic laws they are lying - classic example is Theresa May telling the nurses there "is no magic money tree" when they asked for a pay rise, yet when the election resulted in a hung parliament and the Tories needed to bribe the DUP to form a coalition with them and keep them power, it turned out that, luckily, that thing they'd been growing in the window box and always thought was a tomato plant, was in a fact in magic money tree. Or more cynically they knew had a great big magic money tree but the money that grew on it was only available to use on really important things such as keeping the Tories in power, rather than wasting it on fripperies such as keeping the NHS fully staffed and working.

What I'm saying overall is - still be wary when a politician says that financial constraints force them to enact a given policy, just cos there was one time when the economic constraints did seemingly punish them for enacting a particular policy, it doesn't mean that any time they appeal to that they are telling the truth.
yeah. I agree with all of that. I do think it's going to be interesting to see if they're going to be able to convince their bit of the electorate that this time around the austerity their gearing up to do is a result of something other than the truss period. I hope they don't find a way.
 

IdleRich

IdleRich
Tories have presented Austerity as a pragmatic solution. The argument is that if you cut benefits and so on there will be a saving as there will be less spending. But benefits go to those who have lots of stuff they need but can't afford, as soon as they get any extra money they spend it on those things and it goes straight back into the economy and causes a stimulus. Cutting benefits therefore cuts the stimulus and, as we saw over the years of austerity, the lost stimulus more than wiped out the saving made by cutting the benefits and the economy barely grew.

The other side of the coin is the claim that if you give money to the rich then they will create new businesses which employ people, or create some brilliant invention or something - things that benefit everyone. And no doubt some do do something like that, however the vast majority just add it to their already huge piles in the Cayman Islands or wherever, effectively taking it out of the economy.

The stark reality is, money given to those who need it most goes straight back into the economy, whereas money given to the ultra-rich vanishes. Yet Austerity, while claiming to be a necessary evil which will save money is entirely predicated on the ideological insistence that the exact opposite is true.

As far as I can tell austerity is a huge lie. It claims to be a necessary evil based on the brutal situation we face, when it's actually a deliberate choice, the justification for which in fact rests on the ideological denial of reality and the insistence that black is white. It's sneaky and convincing and a lot of people were fooled into believing that Osborne reluctantly took a tough decision for a greater good. That sadly his form of tough love inevitably immediately hit the poor in the short term - but at least we were all in it together - for a long term gain for everyone.
 

IdleRich

IdleRich
Hang on, in 2008 I was working for Borders Books in accounts payable or treasury or something. Admittedly that did crash pretty spectacularly in its own way but I think that that was more down to amazon than my insatiable lust for obscene levels of wealth.
 

Mr. Tea

Shub-Niggurath, Please
Hang on, in 2008 I was working for Borders Books in accounts payable or treasury or something. Admittedly that did crash pretty spectacularly in its own way but I think that that was more down to amazon than my insatiable lust for obscene levels of wealth.
Yeah, there was a whole chapter about this Black Swan, wasn't there? Butterfly effect, and all that.
 

version

Warehouse Operative
The other side of the coin is the claim that if you give money to the rich then they will create new businesses which employ people, or create some brilliant invention or something - things that benefit everyone. And no doubt some do do something like that, however the vast majority just add it to their already huge piles in the Cayman Islands or wherever, effectively taking it out of the economy.

Given the dominance of companies like Amazon who regularly do this, it's probably impacting the former too as more and more of what regular people spend is funneled into these huge, market-dominating corporations who are constantly looking to dodge tax.
 

vimothy

yurp
I actually don't find this as surprising as some seem to. It's being represented as the government being somehow ruled by shadowy market forces that have a sinister power over us... but another way of looking at it is to say that in every sphere there are certain rules that apply and which can't be overcome however hard you vote for them.

If we were talking physics and Truss had said "I'm going to rescind the law of gravity" we wouldn't be surprised when she failed. But when it's economics and Truss said "We're going to collect less money, and we're going to spend more, and the total amount we have will increase" people think that the fact it didn't work out that way that is a failure of democracy whereas to me it looks more like an idiot making impossible promises.
but it's not always a problem, as we've seen - for eg, during the financial crisis, during covid, etc. personally I think that the major issue here is the shift in policy from the BoE from being the marginal buyer to the marginal seller of gilts. it's that, in combination with simultaneous global tightening from other central banks, which has removed the bottom from the market and resulted in this heightened level of sensitivity to "unfunded" govt spending plans
 

vimothy

yurp
I'm not going so far as to say that the books need to be balanced. I just mean that there are some rules in economics that seem to actually exist, at least in the system if not in the real world - you can't just vote for them to not apply, unless you totally change the whole thing you're stuck with them.
all of these "rules" are totally regime contingent, they're not immutable physical constants. they are "social constructs" which depend on changeable institutional and policy choices
 

vimothy

yurp
which is not to say they cant hurt you, but they dont have to apply - it's a choice, not necessarily your choice, but still a choice somewhere...
 

IdleRich

IdleRich
Conveniently exited the building before the flames took hold.

It was a fucking funny time to be working at Borders in fact. Another national chain had gone under and a lot of their staff were looking for jobs and ended up at Borders and they were sharing their experiences with us - a lot of "Yeah this started happening about a month before we went under" or "ooh, this didn't happen until right by the end". Just a terrible situation, normally you might have invoices filed into those that are not yet due, those that are due, and maybe some that are overdue and perhaps disputed ones in a separate bit. But at Borders there was a sort of "Normal overdue" pile and then "extremely overdue" and "About to be taken to court" followed by "have been taken to court" and so on. And really the supplier had no chance of being paid until they were in the most extreme one. I remember seeing an article in the paper about how unscrupulous companies were using suppliers for unagreed loans by simply delaying payment for ages and I thought "Oh yeah that's us".

The main thing was keeping the lights on and trying to make it look normal so if they turned up to cut the electricity or whatever we would normally pay, but we were getting phone calls all the time saying "Bailiff at the Oxford Street from Grantham Publishers" or "The London Wall store has a bailiff from a publishers and another from the coffee suppliers waiting his turn behind him".

One thing was quite interesting, you know Crackerjack who used to be on this board? He was quite observant cos he spotted that basically they were putting the books on the shelves sideways and doing other tricks to make the shops look more full than they were, he actually messaged me to ask if Borders was in trouble.
 

IdleRich

IdleRich
Given the dominance of companies like Amazon who regularly do this, it's probably impacting the former too as more and more of what regular people spend is funneled into these huge, market-dominating corporations who are constantly looking to dodge tax.

Amazon were completely killing Borders, in fact we were squeezed from both sides, cos say the new Harry Potter or something comes out you could get it cheaper from Amazon, or, maybe you had some loyalty to the little old guy with a shop in your village high street and you pay it a bit more to buy it from him, but no-one was gonna pay more just to keep a big faceless American chain trading. Also you got Oxfam which is the biggest seller of second hand books in Europe I believe and which got all their supplies free, had staff that were volunteers and were exempt from business tax, no wonder they had so much money to spend on drug fuelled orgies with loads of prostitutes.

I know that wasn't what you were talking about with Amazon but that thought jumped into my head then.
 

IdleRich

IdleRich
I was in the head office not one of the stores but it was sort of behind and above the Tottenham Court Road store... which is now a TK Maxx or something I think.
 

shakahislop

Well-known member
i used to go to the borders in oxford all the time when i was on jobseekers, i'd jump the train in (pre-barriers) sit there with a coffee and grab about four magazines (adbusters, wire, soundings, others that weren't as good) and sit there for a few hours on a saturday in the starbucks and put them back on the shelves which apparently was totally fine and a profitable business model for both borders and the magazine publishers. that was the first time i read mark fisher actually when he had a cover story interviewing tricky, i think that was him, obviously i had no idea who he was but the quality of the writing and how aligned it was with stuff i was interested in jumped out, i guess that's the start of the chain of events which led to me clogging up dissensus
 
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